A threat of expropriation of assets that is reasonably possible, and for which the amount of loss can be reasonably estimated, is an example of a (an)
A) Loss contingency that should be disclosed, but not accrued
B) Loss contingency that should be accrued and disclosed
C) Appropriation of retained earnings against which losses should be charged
D) General business risk which should not be accrued and need not be disclosed

Question

Quizplus · Accepted Answer

A threat of expropriation of assets that is reasonably possible and can be estimated is a loss contingency that should be disclosed in the financial statements, but not accrued, as it does not meet the criteria of being probable.

A Threat of Expropriation of Assets That Is Reasonably Possible